HRM Function and Organisational Change

Senior managers’ perceptionsof the HRM function during timesof strategic organizational change

Case study evidence from a public sectorbanking institution in Malaysia

Christopher J. Rees and Hasanah JohariIDPM, University of Manchester, Manchester, UK

Abstract

Purpose – The purpose of this paper is to explore the role played by the human resourcemanagement (HRM) function in strategic organizational change initiatives. The objectives of the paperare to assess the extent to which the HRM function is perceived by senior managers to havecontributed to the strategic organizational change agenda during a period of rapid change, andidentify major challenges HRM professionals face as facilitators of strategic change managementinitiatives in contexts of this nature.

Design/methodology/approach – The research objectives were addressed using literature-basedevidence and primary interview data obtained from qualitative in-depth interviews with the directorsand deputy directors of a public sector banking institution in Malaysia.

Findings – In addition to identifying positive perceptions of the HRM function, the findings raiseissues about the strategic focus, independence, credibility, and leadership strategies associated withthe HR function’s attempts to engage with strategic change initiatives. The findings also reveal therespondents’ views about the extent to which HRM activities have or should have ethical, spiritual,and religious foci.

Practical implications – The implications of the research findings for HRM are discussed withreference to issues such as: the transfer of Western-originating change management approaches tonon-Western settings; the need for organizational change outcomes (including wider societalobjectives) to be delineated clearly with reference to organizational change initiatives; and the closeassociation between ethics, spirituality, and HRM in certain Asian contexts.

Originality/value – The paper offers a valuable insight into the role of the HRM function inorganizational change interventions with specific reference to the context of Malaysia.

Keywords Organizational change, Malaysia, Human resource management, Religion, Ethics,Senior managers

Paper type Research paper

IntroductionIn recent years, organizational change and development (OCD) has emerged as a keytheme in business and management literature (Burnes, 2004; Cummings and Worley,2008; Senior, 2005; Whitely and Whitely, 2007). From the outset, we note that OCD asboth an academic focus and as an applied behavioral science cannot be separated frompeople management and human behavior within organizations (Olesen et al., 2007).All change, whether it relates primarily to strategy (Graetz, 2000; Black and Lynch,2004), technology (Bell et al., 2006), finance (Broadbent et al., 2001), marketing (Farrell,2000) or logistics (Chapman et al., 2003), is inextricably associated with the people whoact as the instigators, agents, consumers, and perhaps even victims of OCD initiatives.

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Perceptions ofthe HRMfunction

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Journal of Organizational ChangeManagement

Vol. 23 No. 5, 2010pp. 517-536

q Emerald Group Publishing Limited0953-4814

DOI 10.1108/09534811011071261

In practice, this relationship between change management and people managementis highlighted by the convergence of activities associated with disciplines such ashuman resource management (HRM), human resource development, and alsoorganization development, which was, traditionally at least, seen to represent adistinctive approach to management of OCD which was founded upon humanisticphilosophy and principles (Rees, 2008). Ruona and Gibson (2004) propose that thisconvergence is required to ensure that (what they term) twenty-first century HR isfocused upon, for example, strategic alignment and impact and capacity for change.Similarly, Ellis (2000, p. 32) has argued that the boundaries between HR activities andchange management activities within organizations are becoming “[. . . ] increasinglyblurred” as a direct result of the “[. . .] inherent shift by HR professionals to a strategicdimension.” Given this assertion, we wish to highlight the paucity of studies, whichexamine, from stakeholders’ perspectives, the perceptions of the change managementcontribution made by the managerial function most closely associated with peoplemanagement within organizations, that is, the HRM function.

In this study, we specifically examine managerial perceptions of HRM activitiesduring times of strategic organizational change. Earlier, research conducted in the USA(Wright et al., 1998) found that line executives, while recognizing the potentialimportance of the HR function, tend to rate HR effectiveness less positively than do HRexecutives themselves. Wright et al. (1998, p. 16) propose that it is for HR professionalsto be more effective in demonstrating and communicating their effectiveness to lineexecutives. This is not, however, a straightforward issue. For example, in highlightingthe complexity of the relationship between organizational performance and themanagement of human resources, Delery and Doty (1996) conclude that “some HRpractices are more appropriate under certain strategic conditions and less appropriateunder others”. We posit that, in order to demonstrate and communicate thecontribution and effectiveness of the HR function, greater clarification is needed abouthow the HR function is perceived by line managers particularly in settings wherecontextual variables such as radical change, hierarchical management structures,ethics, and spirituality impact upon the practice of management to a relativelyinfluential degree.

We use both literature and primary research data to focus upon the HRM functionas an organizationally based people-focused resource that facilitates organizationalchange initiatives. The research is undertaken with the main aim of:

(1) exploring the extent to which the HRM function is perceived by seniormanagers to have contributed to the strategic organizational change agendaduring a period of rapid change; and thus

(2) identifying key challenges HRM professionals face as facilitators of strategicchange management initiatives in this context and potentially more widely.

We explore managerial concerns about the HRM function, issues that influence seniormanagers’ perceptions of the credibility of the HRM function’s role in strategic change,and senior managers’ perspectives on ethics and spirituality of HRM-related activitiesduring times of organizational change. The geographical focus of our study isMalaysia. In many, ways Malaysia epitomizes the complexities associated withstrategic organizational change initiatives in Asia. The choice of this country and itsrelevance to the study are discussed further in the methodology section.

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The remaining sections of the paper are structured as follows. We commence byreviewing literature that discusses the need for HRM theory and practice to becomemore focused on strategic change. We then report and discuss the findings ofinterviews conducted with senior managers of a large and influential publically ownedfinancial institution in Malaysia which address the aim identified above. Finally, wesummarize the conclusions drawn from the study in relation to the advancement ofcurrent theory and areas for future research.

HRM and organizational change: the search for a strategic focusWithin the Western context, many HR experts (Baill, 1999; Hodgetts et al., 1999;Jamrog and Overholt, 2004; Sheppeck and Militello, 2000; Sparrow and Marchington,1998) have challenged HRM theorists and practitioners to move from transactional tostrategic models and activities and to become a strategic change partner. For example,Ulrich (1998, p. 127), a leading champion of HR in his article “A new mandate forhuman resources” identified four ways in which HR could help deliver organizationalexcellence and one of them was for “HR to become a partner in strategy execution andbe held responsible for designing the organizational architecture”.

In a similar vein, empirical findings from another study (Lawler and Mohrman, 2003)revealed that to be “true” strategic partners, the HR function must spend time beyonddelivering services, maintaining records, and auditing. Instead, HR professionals shouldspend more time performing strategic HR planning; and making contributions toorganizational design, strategy development, and strategic change. Nevertheless, thechallenge of becoming a strategic business partner, has arguably remained an elusivegoal for many HR professionals ( Jamrog and Overholt, 2004; Lengnick-Hall andLengnick-Hall, 2003). Certainly, there is little consensus over whether HRM has beenable to execute the strategic contribution role (Morley et al., 2006). Issues have emergedsuch as to the extent to which HRM’s strategic focus is purely symbolic (Sheehan, 2005),or indeed, at a fundamental level, whether HRM should accept that it is a support ratherthan a strategic function (Wielemaker and Flint, 2005).

Given this call for strategically focused HRM, questions inevitably arise as to theroles expected of and played by organizational HRM functions. In settings in Asia,these questions become more vexatious given the transitional state of many of thenational economies, the cultural diversity of the region and the evolving nature of HRMin this context. This point was raised by Warner (2000, p. 181) who, in his quest for theAsia-Pacific HRM model, found that the sheer variation of geography, population,economies, labor markets, IR, and HRM systems of the region as well as its values,made it difficult to conclude whether there was actually hard evidence of convergenceof HRM in the region. Apart from that, Warner stressed the diversity of the region interms of geographical factors with the People’s Republic of China clearly pre-eminentin terms of land-mass and population; political factors with the British, Dutch, French,and Japanese, Marxist-Leninism colonial legacies; cultural traditions crossingcountries and varying within regional areas, not to mention the different religiousinfluences ranging from Confucianism, Christianity, Islam, Hinduism among others.He could only conclude that the “[. . .] Asia-Pacific model is far from homogeneous.”

Research by Mamman et al. (2006) also attested to this heterogeneity. They reportedthat within Asia, countries such as Australia appear to have adopted Anglo-Saxonapproaches to HRM, while countries such as Sri Lanka have adopted more complex


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and varied approaches to HRM partly due to the influences of MNC’s. Lasserre andSchutte’s (1999, pp. 282-3) summary of what they termed “enduring characteristics” ofthe Asian social organization and group behavior present across the region is a usefuldiscourse to highlight why managing human resources in the region is a demandingbusiness. Similarly, Debrah and Budhwar (2004) provided an insight into the HRMchallenges facing the Asia-Pacific region as complex and daunting, suggesting thatfuture form of HRM in the region may be a hybrid and context-based system,comprised of a mixture of Western rationalized systems and traditional Asiancharacteristics. Certainly, when compared to the West, HRM in Asia is a relativelyyoung concept and may even be labeled as in its “infancy” stage (APMF, 1999).

Those seeking to explore HRM issues in Asia are likely to find that a majorconstraint is the lack of a relevant and topical body of academic literature. Forexample, Budhwar (2004), highlighted that HRM literature connected to the regionlacks a systematic representative analysis which could present a comprehensivepicture of the dynamics of existent HRM:

Much of the existing literature of late has been conducted and published issues related toHRM in other advanced countries of the region such as Singapore, Hong Kong Taiwan andKorea [. . .] and much research is being published on different aspects of management in theChinese context [. . .] yet research publications on other important emerging markets such asIndia, Malaysia, Thailand, Indonesia and the Philippines have been at a very slow andinfrequent pace.

Furthermore, as pointed out by Warner (2000, p. 171), HRM issues are often subsumedunder economic and social issues of the region or generalized:

The problem of analyzing the characteristics of human resource, broadly defined, as found inthe Asia-Pacific region, is not without its pitfalls. The economic, social and HRM problems ofthe region are from time to time discussed in a single breath, as has been lately the caseduring the so-called Asian crisis of the late 1990s [. . .] yet the economies countries in that partof the world, were and are, clearly not homogeneous.

In examining deeper the discourse on HRM in Asia, an area which has been accordedmeager attention, is the bearing of religious values on work practices (Bouma et al.,2003). Given the fact that nations in the Asia-Pacific region are religiouslyheterogeneous, the influence of religion in HRM is a very pertinent discourse for anydeliberation on HRM. For example, Koys (2001) attempted to make an effectiveargument that many ethical problems faced by organizations concerning HRM couldbe tackled if religious principles were integrated into HRM processes. Similarly, Tayeb(1997) offered an interesting perspective on the HRM discourse by linking HRM toIslamic religious values as an approach to examine the management of workforce inorganizations in Muslim countries. This approach has particular significanceconsidering many Muslims are to be found in the Asia-Pacific region, particularly inIndonesia, Malaysia, Singapore, Thailand, and the Philippines. Some research evidenceis available to suggest that organizations which run on Islamic principles functionsuccessfully and out-perform others, not just under normal conditions, but even inturbulent times such as in the recent Asian crisis (Budhwar and Fadzil, 2000, p. 173).Nonetheless, Tayeb (1997) cautioned that one should not conclude that organizationsthat embrace Islamic values in the workplace practice effective teamwork, and adoptconsultative, participative, egalitarian management styles, thereby minimizing

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stereotypical HRM problems. Rather, they were, as Tayeb (1997) argued, vulnerableand exposed to the “ills” of social, economic, and political factors which more oftenthan not, taint the “ideal” Muslim values. In this study, we recognize from the outsetthat the influence of religious values is likely to be of particular relevance to employees’perceptions of HRM practices, given the organizational context of the research is anorganization situated in a predominantly Muslim society (Malaysia).

In summary, theorists have emphasized the need for HRM to focus uponorganizational change interventions from a strategic perspective, that is, a perspectivewhich seeks to align the management of people within organizations with thesuccessful implementation of business strategies (Schuler and Tarique, 2007). Yet,the same body of literature also highlights that managing strategic change in theAsia-Pacific region is particularly problematic given both the transitional andheterogeneous features of the region and the emerging evidence of the lack ofbusiness-related competencies among some HR professionals in countries such asMalaysia (Long and Ismail, 2008; Yusoff et al., 2009). To date, HRM literature onstrategic change has reflected research in many situations in Western contexts andmore developed countries in the Asia-Pacific region such as Japan, Singapore, andKorea. Yet, there appears to be limited coverage on HRM’s role in strategic change inan emerging economy like Malaysia (Budhwar, 2004; Gross, 1997; Norashikin et al.,2009; Rozhan et al., 2001) and in the financial services sector in particular (Storey,2002). Additionally, Jarvis (1999), Salaman et al. (2005) and Mamman and Rees (2004)have all suggested the need for more practitioner-researcher type of research to enrichthe discourse on HRM particularly, in understanding the obstacles that practitionersface in the workplace as they attempt to execute the concept of strategic HRM.Moreover, the clear shortage of discussion on managing HRM in the banking sectorwarrants addressing, given the relative importance that financial institutions play ineconomic development at national levels. This study will therefore attempt to addressthe call for more practitioner-researcher type HRM research in an emergent Asianeconomy, namely, Malaysia.

The national and organizational context of the studyMalaysiaThe focus of the current research is Malaysia, a country that, as noted above,epitomizes the complexities associated with strategic organizational change initiativesin Asia. Malaysia, once a British colony, is located in the Southeast Asia region andboasts of a multicultural heritage as a result of its diversified 27 million people. Themajor racial components comprise of the Malays and other indigenous groups61 percent, Chinese 24 percent, Indian 8 percent and others 8 percent. As to religions,Islam is the dominant religion, followed by Buddhism, Daoism, Hinduism, Christianity,and other beliefs (INFOPLEASE, 2007).

In recent years, Malaysia has formulated a range of policies and plans to guide themanagement of national development and these include the New Economic Policy1970-2000, and the National Development Policy 1991-2000 (The World Bank, 2004).The latest economic development policies are spelled out in the Ninth Malaysia Plan(2006-2010). Complementary to these policies is the country’s national Vision 2020.In 2007, the International Monetary Fund (IMF) stated that, since the launch of Vision2020 in 1991, Malaysia has made significant progress toward achieving advanced


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country status, underpinned by strong export-led growth, low inflation, and thedeepening of its financial markets (IMF, 2007).

Malaysia emerged from the turbulence of the 1997-1998 Asian Financial Crisismuch strengthened and on a solid and steady growth and has “coped with the crisisbetter than her Southeast Asian neighbors” (Smith and Abdullah, 2004, p. 402). Indeed,from a country that declined to be placed under the IMF programmed and stood firmby the conviction that it is a country’s legitimate right to defend itself during extremecondition, Malaysia’s pragmatic macroeconomic management and decisive efforts todeepen structural reform was recognized by the IMF Executive Board (IMF, 2005). TheWorld Bank report that GDP in Malaysia 6.3 percent in 2007, up from 5.9 percentin 2006. As a result of the worldwide financial crisis, however, Malaysia has since seenits economy contract and in 2009, introduced a $19 billion stimulus spending plan(Deloitte, 2009).

By and large, Malaysia’s progressive accomplishments can be attributed to strongleadership and political will, a well-trained and educated civil service, a well-developedphysical and institutional infrastructure, a strong private sector, motivatednon-governmental organizations and academic communities focused on a balancedapproach to economic growth, and social development (UNICEF, 2005). Additionally,among the non-economic factors which have played a contributory role to the economicgrowth of Malaysia, is its peace and tranquility; here has been a virtual absence ofracial strife in Malaysia since 1969 (The World Bank, 2004).

The case study organization: Bank AAs noted above, many factors have helped Malaysia to restore its economic situation.Nevertheless, the important role played by financial institutions in the economicdevelopment of the country is well documented (Ang and McKibbin, 2007; Ibrahim,2007). In fact, the Prime Minister’s Office identified that one of the main functions ofdevelopment planners in Malaysia was to ensure banking and financial sector stability(Wee, 2002). Traditionally, the banking sector in Malaysia has been highly regulatedand stable. However, in recent years, the sector has experienced rapid change whichhas exerted significant impact on banking operations and specifically on the role ofhuman resource departments (Chew and Choo, 2008).

Since inception, the human resource practices of the case study organization, BankA, have been transformed from typical public sector personnel management to more“private sector” oriented human resource practices. Bank A is a financial servicesinstitution which is wholly owned by the Federal Government of Malaysia. In the earlydays, like many organizations in the West, people management in Bank A wasassociated with traditional personnel management and much of the operationalday-to-day activities were strongly steered by the Jabatan Perkhidmatan Awam’s (or inEnglish, public services department) service circulars. Synonymous with hugepaperwork, slow processing time and fire fighting activities, its personnel department(PD) was not held in high esteem. Nonetheless, the PD, renamed as the HRMdepartment, has progressed in recent years and has been involved in many endeavorsto enhance its role as the department responsible for the key role of attracting,retaining, and developing talents in the new century.

The real presence of change in Bank A, after the appointment of the AG, was theintroduction of an organization-wide five-year change programme in 2005. It was during

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this period that Bank A introduced, with the services of an external consultancy,a number of key HR strategic interventions. These included: broad banding (that is,the compression of hierarchy of grades into small number of wide bands) to enhancecareer opportunities; the adoption of a competency-based approach to performancemanagement; the launch of a set of HR practices pertaining to recruitment, appraisal,training, scholarship, transfer, promotion, and succession policies to revamp its peoplemanagement activities.

In 2001, a further portfolio of bold and highly innovative HR-related strategicprojects was introduced into Bank A as part of the “institutionalization of theknowledge management concepts and practices”. The outcomes of the strategicprojects were to be seen in specific initiatives such as the introduction of a mentoringprogram aimed at nurturing future leaders, a flexible benefits plan which was designedto provide staff with the choice and flexibility to customize selected benefits to fitdiverse individual needs throughout their different career stages, and a performancemanagement system that was designed to measure not only achievements of targets orkey results areas, but also to measure the development of competencies that are criticalfoundations for the long-term development of staff in Bank A. To further strengthenthe business of managing performance, Bank A also introduced a complementaryEmployee Assistance Program to ensure minimum expected targets were beingachieved. These initiatives, coupled with the transitional environment in which Bank Awas operating, placed great expectations on the HRM function to deliver effectivechange management implementation strategies.

In the light of this change management context, the following sections of the paperfocus upon the perceptions of senior managers towards Bank A’s HRM function and itsperformance. This study is thus designed to achieve the following three researchobjectives; first, to explore the key concerns of the senior managers with regard toHRM practice in Bank A; second, to identify issues that may influence seniormanagers’ perceptions of the relevance of the HRM function to strategic changeinitiatives; and third, to obtain senior managers’ views about ethics and spirituality inHRM-related activities.

MethodologyIn order to address the research objectives stated above, data were gathered usinginterviews that contained three anchor questions namely:

RQ1. To what extent has the HRM function played a contributory role to thestrategic change management agenda?

RQ2. What can HRM do to enhance their relevance or to remain relevant to linemanagers?

RQ3. What are your views on integrating ethics and spirituality into HRM practicesin the workplace?

The interviews generally lasted around one to one-and-a-half hours and weretape-recorded. The interviews were, on the whole, conducted in English, as the Englishlanguage is widely used in formal and informal interaction in Bank A. The interviewtranscripts were examined with the aid of ATLAS.ti, a visual qualitative data analysiscomputer software, recommended for analysts wishing to “[. . .] construct linkages


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between any elements of the qualitative database” (Kelle et al., 1995, p. 199). Analyzesof the interviewees’ transcripts were guided by the 5QDA approach advocated byAnderson (2004), in which the collected data were reduced then explored for themesand patterns.

For this study, a purposive sampling technique was deemed to be appropriate(Anderson, 2004; Goering and Streiner, 1996). The respondents (n ¼ 24) were drawnfrom a cross-section of the 25þ departments in Bank A and every sector (of whichthere are five) had at least one representation by a head of department/director. In theevent that the director was not available, a deputy director was selected instead. Thevery high level of seniority of these respondents is highlighted. Owing to the need toretain their anonymity, a more detailed biographical profile of the respondents is notpresented; though, without compromising assurances of anonymity, it is appropriate tostate that the group contained men and women, and Muslims and Christians. Thefindings are presented below.

FindingsThe emergent themes from the interview data provided by the respondents wereclassified into four clusters: the strategic role of the HRM function; HRM credibility andindependence; the quality of HRM communication; and ethics, spirituality, and HRM.The findings relating to these themes together with selected corresponding verbatimquotes are presented below.

The strategic role of the HRM functionFrom the outset, the majority of the respondents recognized the advances that hadtaken place in the organization’s HRM policies and practices over recent years. Forexample, in a fairly typical response when discussing this issue, one respondent stated:

HR has done a lot in many aspects [. . .] rewards, recruitment, development centers [. . .] we aremoving a lot more than before [. . .] there are plans to do more in the future [R7].

Similarly, another respondent used the following phraseology when describing theorganization’s progress in the area of HRM over recent years:

We need to acknowledge that for the past few years there has been much focus on peoplethrough the HR initiatives. All the previous effort needs to be recognized, most of thediscussion is now about improving it [. . .] not that we are so bad [R3].

However, despite the HRM function’s involvement in a range of change managementinitiatives, as discussed above, there was a clear consensus among the senior managerrespondents that the function had yet to achieve a clear strategic focus. For example,one of the respondents spoke of the need for the HRM function to:

Keep in touch with the business; be a business partner; get involved with the line [. . .]understand the performance issues [. . .] we are all learning [R6].

Interestingly, the interview data provided evidence that a minority sub-group ofrespondents specifically questioned the HRM function’s understanding of businessperformance and suggested that the function was too focused upon the operationalaspects of activities such as recruitment: For example, in the words of one respondent:

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I would say the main hindrance is that they [HRM] are more concerned with their day to dayoperational or business matters [. . .] which allow them little room to focus or concentrate onthe strategic people management [R10].

Similarly, another respondent stated:

HRM would need to identify the relevant issues in the 21st century. They need to go beyondrecruitment and be the knowledge brokers in related areas” [R18].

In a similar vein, another respondent questioned the extent to which the HRM functionwas being driven by operational rather than strategic concerns:

The more you [HRM] understand what are the strategic results you want to achieve [. . .] themore the operational issues become simpler to manage [R14].

Within the context of this study, that is, a key public sector financial institution inMalaysia, it is highlighted that, when assessing the strategic contribution of the HRMfunction, some of these senior managers clearly articulated the view that HRM shouldbe making a strategic contribution not just to the organization but also to the widergood of both the sector and the country. Respondents referred to the national economyand the wider community. For example:

[. . .] can’t the Personnel see their work of recruiting people, if they recruit the right person,they could make a big change to the nation’s economy. These people would contribute [. . .]with a better way of doing things [. . .] saving a lot of the Bank’s money and the Governments’money [R2].

Similarly, in the words of another respondent:

It is important to identify HRM direction upfront. What kind of HRM do we want Bank A tohave? Is it a HRM for internal people management need of Bank A, or HRM that can alsocontribute to the Community and the Banking Industry? [R17].

The fact that senior managers were arguing that the HRM function should be making apositive contribution to activities both inside and outside of the organization is anotable finding of this study, which is discussed further in the conclusion section ofthis paper.

Strategic HRM: credibility and independenceFurther analysis of the interview data indicates that the majority of the respondentssaw credibility and independence as key issues that the HRM function had to face if itwas adopt a strategic role within the organization. When seeking to explain how suchcredibility and independence could be fostered by the HRM function, words such as“bravery”, “boldness”, and “leadership” were frequently used: For example:

You need to be brave enough to break away from the structure [. . .] the question is about howyou achieve you result [. . .] without being constrained by the current structure [R10].

In the words of another respondent:

Because HR need to be very brave, you cannot have HR that just succumbs to the pressures ofthe line department [. . .] or top management and I see the most important factor that candrive more changes with regard to how people carry themselves or behave and conduct isvery much about leadership by example [R1].


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Another respondent using the following phraseology when discussing these issues:

[. . .] HRM must be bold enough to challenge existing policies and practice and not behampered by procedures which have been in existence for so long and suitable for time longpast [. . .] HRM must take an objective and independent stance to advise management on allcosts related to people management [R21].

The main message emerging was for the need for HRM staff to be brave spokespersonson HRM matters and the initiator of ideas rather than becoming mere followers orimplementers of ideas. The underlying contention by the respondents is that only whenthese two elements would be addressed could the HRM function be seen in a positivelight within the organization. Nevertheless, some of respondents recognized this, inreality was a major challenge given the low self-esteem that HRM people may have dueto often being “flogged”:

I guess the reason is that they are often lashed at, to the extent that they feel inferior, what apity it is. How can they confidently present themselves and meet people? [R1].

Quality of HRM communicationThe interview data revealed a clear consensus among the respondents around the needfor improved communication between the HRM function and senior managers overHRM initiatives. One respondent succinctly summarized this consensus:

There is a need for people in HR to talk to the line; there is a need for more interaction [R3].

Other respondents provided more detailed statements about this communication issue.For example:

On the issue of communication, the feeling is [. . .] why are you passing the buck to us? HRMneeds to get people engaged in the process [. . .] have a dialogue [. . .] what needs to be madeclear is the need for smart partnership. Establish that kind of partnership [. . .] once we havethose partnership things can go well [R7].

Another respondent recommended that the issue of communication be addressedthrough the structure already in place or in other words, leverage on existing process:

I think if HRM wants to be effective here, HRM needs to conduct an Audit and actually findout what are the communication problems that we face. It is not that we do not have theinfrastructure [. . .] we must ensure that our people are comfortable to operate in that culture.It is very much about relationship building [R1].

From the views above, it was evident that, as a group, the respondents believed thatthe orientation of HRM communication must be altered in order for HRM to get peopleengaged in HRM processes. This, they felt, could be achieved through HRM striking anactive partnership with the line and constantly delivering clear messages, so as not togive the delusion of “passing the buck” to the line. Certainly, from some responses, onecan gauge the necessity for greater clarity in the HRM function’s approach tocommunication. For example:

It is okay if you tell me openly [. . .] the objective of [Bank A] is the priority at the expense ofyour department [. . .] this is a conscious decision by management. I take it [. . .] I am ok. Myperformances later on will not be measured as though I have not taken these things intoaccount [R2].

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Similarly:

Staff should not be second-guessing what higher management would like to see and producethe view or opinion but should be more upfront in deliberating issues that are viable andmerits consideration [R24].

Other respondents acknowledged the efforts made by HRM but highlighted that thework pressures from management may be one key reason as to why many linemanagers tend to neglect practicing what has been communicated by HRMD:

As a LD, I can see why it happened that way [. . .] because higher management is pressuringus for result. There is little room to sit down [. . .] pay attention to motivating [. . .] coachingyour staff and do all those things [R10].

Ethics and spiritualityThe responses of this group of senior managers to issues relating to ethics andspirituality produced surprisingly little variation. For example, the majority of therespondents spoke very positively about the ethical climate of the organization, theinterview data provide evidence that respondents also questioned the impact ofperformance-led initiatives on this climate. This perception is encapsulated in thefollowing quote:

The ethical dimension as you say [. . .] it is a cultural issue [. . .] I think [Bank A] has a verygood ethical culture. You see [. . .] in [Bank A] if you show a bit of dishonesty, people pick it upvery fast. But things are changing very fast; we find new ways of doing things [. . .] thereforethe emphasis on ethics is very timely. I won’t want to have a dishonest person here. If therewere any inkling of dishonesty, it would have been weeded out at the interview level. Otherthan that we do not have the opportunity to gauge the ethical stance of the candidates. So it isthe questions that are chosen. If there is a hint of irresponsibility, reckless, dishonesty, thepanel will not want to hire them [R14].

Respondents also raised questions relating to specific HRM interventions and theirimpact upon the ethical climate of the organization. For example:

When people do the performance appraisal, do they do it because of the form or because of thesubstance? Our management appears to be concerned about graph performance [. . .] soperformance is pushed to make sure everything is fair. Where is the real sense of assessmentand real value? Staff does not have enough trust about this process [R1].

On the issue of integrating spirituality into the workplace, respondents were open tothe concept and in fact, spoke positively about the spiritual climate of the organization.For example:

I am Christian [. . .] no problems associating with other Christians in this bank [. . .] there isa lot of freedom [. . .] and much of [Bank A’s] work is spiritual [. . .] You are supposed todo the right thing [. . .] therefore it really enhances your spirituality and [Bank A’s]work [R14].

Notably, the majority of respondents were in favor of integrating universal valuesrather than religiously linked values, given the diversity of the workforce. For example,one respondent stated succinctly:

If you want to promote spirituality don’t link it to any religion [. . .] promote it to the level ofuniversal values. All religions are in line with universal values [R10].


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Similarly, another respondent stated:

Would be a good move it can be implemented. If it has to be done, then do it “cautiously andopenly”; we have different beliefs and religions thus we need to understand each other andviews of their religious commitment [. . .] concentrate on similarities and simple religiousprinciples that are universal [R12].

In the words of another respondent:

Integrating spirituality is good [. . .] that is what an organization should always be guided by.[Bank A] is made up of multi religious staffing need not be confined to religion of Islam only –basing on all basic values of religion spirituality can be injected – all these universal values areall compatible with Islam and can apply across the board [R24].

Respondents, both Muslims and Christians, commented on the integration of Islamicwork ethics in the workplace, particularly in relation to HRM practices whichpermitted employees to practice beliefs like prayers during working hours. Many of therespondents expressed support for such integration, provided it was well managed.Interestingly, however, the most resounding concerns came from Muslim respondents.For example:

I don’t have to say that I want you to pray during lunch hours [. . .] but I want Muslims toknow that they should pray during lunch break. Because the other times [. . .] I am supposedto work. But if they say they want to pray regardless of time [. . .] as though as I have no t fearor guilt if I go and pray during working hours [. . .] even though I can do it during my resthours [. . .] that is different [. . .] you are hired by the organization to perform and we mustremember this is not a 100 per cent Muslim organization [R2].

Similarly, another Muslim respondent stated:

It must be based on real understanding of the spirit behind it. In Islam, worshipping Godcomes in many ways [. . .] of course, prayers comes first but you must not choose a time topray that interferes with your current work. When you are doing your work well, you areactually worshipping God [R10].

Yet, some of the non-Muslim respondents expressed a degree of admiration for thosewho, through their embracing of Islamic work ethics, prayed during the working day.For example:

Prayers are being done [. . .] work is not interrupted. Prayer time is a personal matter; it’smore lack of understanding – difficult to understand, as it is very different [R4].

Similarly, in the words of another non-Muslim respondent:

I am doing a lot of Islamic work in [Bank A] [. . .] and I can stand and admire the Muslims I amworking with. Some of them are spiritual in their ways [. . .] they won’t want to compromiseanything because of their fear of God [. . .] For the Muslims, they are given the “Surau” (prayerroom) [. . .] for us Christians, we gather every Xmas together, we can even train for the Choirin our department [. . .] we never had [. . .] I have been here for [XX] years and seen noproblems [R14].

Thus, on the subject of integrating spirituality in the workplace, these findings showthat it is a delicate matter that must be handled with care. The main message was toelevate spirituality to more universally accepted values, which could appeal to allcategories of staff, given the diversity in the workforce. On the experience of dealing

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with Islamic work ethics in the workplace, the respondents were generally positive, inso far as they believed that the affected employees have not been exploiting thisflexibility accorded to them. As indicated above, Muslim respondents argued that someof their fellow-Muslims could broaden their outlook on worship, beyond performingfive obligatory prayers, to include work as a form of practical worship.

ConclusionEarlier sections of the paper highlighted calls for practitioner-focused research intoHRM management issues in Asian countries such as Indonesia, Malaysia, andThailand. This study has sought to answer this call by exploring the perceptionstowards the HRM function of a group of very senior managers in a key public sectorfinancial institution in Malaysia that has undergone major organizational change overrecent years. While acknowledging the limitations of this study, for example its focuson a single organization, the interview data provide a rare and fascinating insight intothe way in which the HRM function is perceived by a group of senior managers in thistransitional setting in Asia.

A clear theme that emerges from the literature review is that the practice of strategicHRM is as vexatious in this non-Western context as in the Western contexts in whichHRM originated Rose et al., 2008). The primary data obtained from the case studyorganization served to reinforce this conclusion and to provide insights into why thismay be so. Thus, despite introducing a raft of HRM-related change managementinterventions, the strategic focus, independence, and credibility of the HRM function inthis Malaysian organization were questioned by its senior managers. For example, themajority of the respondents expressed the view that the HRM function was tooconcerned with operational matters such as recruitment and selection. As such, thefindings reveal more of the potential inconsistency between trying to be strategic andbeing perceived by senior managers as achieving operational efficiency. This findinglends support to the position that there needs to be clearly articulated verticalintegration between relevant HRM strategies and organizational goals (Armstrong,2000; Fombrun et al., 1984; Wright and Snell, 1998). More crucially, however,respondents in this study highlighted the importance of leadership in establishing theHRM function’s credibility and independence within an organization.

This finding relating to leadership needs to be considered carefully for it raises keyquestions about the application of Western-originating HRM in countries likeMalaysia. The senior managers in this study suggested that, for the HRM function tooperate strategically, credibly, and independently, those within the function had tospeak with bravery and boldness. While it could be argued that bravery and boldnessrepresent both generic and positive leadership characteristics, any discussion ofleadership in a Malaysian organization, Bank A or otherwise, must be deliberated uponwith reference to the complex and developing nature of Malaysian culture and values(Selvarajah and Meyer, 2008). Cross-cultural research (Abdullah, 1992; Schermerhornand Bond, 1997) has shown that Malaysians tend to be, for example, more indirectwhen communicating their disappointment for fear of hurting the feelings of the otherparty. Further, Malaysian workers are generally group oriented, respectful of eldersand hierarchy, emphasize loyalty and consensus, and are concerned with harmony inrelationships. This is further reinforced by studies such as that by Lim (2001), whichreveal that Malaysia’s cultural dimension (over ten years after Hofstede’s seminal work


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was published) remains high power distance, indicating that Malaysian leaders mayfind it difficult to be frank about work-related issues (Hamzah-Sendut, 1990 inAbdullah, 1992).

This study presents a stark reminder that the degree and acceptability of opennessis culturally determined. The conclusion we draw is that, if, as stated by our Malaysianrespondents in this context, bold and brave direct communication is a prerequisite forstrategic and credible HRM, further research must be undertaken to review therelevance of Western-emanating HRM to Malaysian organizations. The push forgreater openness in managing people is something that has emerged in recent WesternHRM literature (Storey, 2005) with writers such as Marques (2006) writing aboutentwinement or increased interdependency among constituents at all levels. At veryleast, the findings of this present study lead us to call for the management developmentimplications for HRM practitioners themselves to be revisited in contexts such asMalaysia where prevailing mores and etiquette appear to clash with certain aspects ofthe modes of open personal communication that have become associated with the drivetowards strategic HRM in Western contexts.

Additionally, this study revealed the senior managers’ need to clarify HRMoutcomes, that is, what is it that the HRM function is seeking to achieve and how dothese outcomes contribute to the performance of the organization? The respondentscalled for HRM outcomes (including wider societal objectives) to be clearly delineated.This finding reverberates support for Beer et al.’s (1984) seminal work on HRM whichhighlighted the necessity for HRM to have clear outcomes such as commitment,competence, congruence, and cost effectiveness. The finding also resonates with theemerging body of literature on corporate social responsibility in Asia (Chapple andMoon, 2005). It provides an indication that HRM functions within Malaysianorganizations may find that the environment is conducive to corporate socialresponsibility initiatives and, as such, HRM professionals may wish to explore thepossibilities of further expanding the remit of their work in this area.

The findings from the interviews provide an insight into senior managers’ concernsabout the quality of communication emanating from an HRM function, which is seekingto introduce strategic organizational change. Respondents expressed unease with issuesof timeliness, transparency, inconsistency in messaging, and a perceived limiteddialogue on HRM issues. Interestingly, this finding resonates with findings from otherstudies in Western countries (Christensen, 2006; D’aprix and Tyler, 2006). However, weagain draw attention to the fact that this study was conducted in a public sector financialinstitution in an Asian country. In the past, the banking sector has often been shroudedin secrecy with some “mystique” surrounding it ( Jenkins, 2004). The study demonstratesthat attempts to improve information and transparency should not relate solely tofinancial indicators but also, in the view of the respondents, to the practice of HRM in theworkplace. The study provides support to those who have argued that HRM will have towork with corporate communications as, communication and people managementactivities can no longer be treated as separate activities (Turner, 2003).

Finally, the findings of this study demonstrate the close association between ethics,spirituality, and HRM in certain Asian contexts. For example, the selected interviewquotes provided above demonstrate that the respondents assessed HRM changeinterventions, such as the performance management system, partly in relation to theirimpact on the organization’s ethical climate. This close link between ethical standards

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and HRM activities coincides with Gubman’s (2004, p. 23) contention that there is noneed for a chief ethics officer as propagated by much of the literature, but rather thisrole should fall on the shoulders of the HR leader:

If HR is the steward for people in the organization, it should be the steward for ethics. Thereshould be no need for a chief ethics officer [. . .] it should be the HR leader.

This is also the view of many others (Gravett, 2002; Foote and Robinson, 1999;Christensen, 2006; Fitz-Enz and Davison, 2002) who contend that the role of “ethicalguardian” should rest with HR as ethics determine human experiences in the workplace.

On this issue of spirituality, this study lends further support to Koys’s (2001)argument that many ethical problems concerning HRM could be tackled if spiritualprinciples were better integrated into HRM processes. For example, the present studyhighlighted the overwhelming view of the senior managers that spirituality in theworkplace was a key HRM concern but further, that spirituality should be linked touniversal rather than religious values. Thus, there was a discernible level of discomfortamong the respondents in associating spirituality to religious values in the workplace.While most of the respondents (including non-Muslims) saw Islamic work ethics ascomplementary to workplace values, they also rejected the imposition of Muslimvalues in the workplace despite the fact that the majority of Malays practice Islam.

This finding presents a challenge to those who may assume that workplacedemographics can necessarily be used to determine formulaic HRM policies inrelation to, for example, religious observances. This study observed that people weremore open to discussing ethics in the light of their shared organizational values asopposed to values associated with particular religions. Marrewijk (2004, p. 139) haspresented a similar view when he states; “[. . .] evidently, it makes sense to build aworkplace culture, based on common values, core competence and a shared missionand vision.”

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Further reading

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Corresponding authorChristopher J. Rees can be contacted at: [email protected]

To purchase reprints of this article please e-mail: [email protected] visit our web site for further details: www.emeraldinsight.com/reprints

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